Letters to the Editor: October 23 – 29, 2014
Treasurer Candidate Got Facts Wrong at Forum
I am a supporter for the election of Jody Acosta for city treasurer. We are always lucky to live in this city and meet some great people, raising their families but who also find time to get involved to keep this city a great place. Jody is one of those people.
Last Thursday I attended the candidate’s forum at the American Legion. The other candidate for treasurer, Chris Johnson, emphasized his main contribution if elected would be his leadership skills.
During his presentation he alleged that there were various egregious failures in the treasurer’s office that he would fix. Through his own investigation, including FOIA’s, he claims he learned that the city’s independent auditors had “identified and reported a significant deficiency in the treasurer’s office” in the 2013 audit. However, it turned out that he had his “facts” totally wrong. He was corrected and told that the audit he was citing was for the city’s Office of Finance – not the totally separate and unrelated treasurer’s office. The treasurer’s office was not cited – for anything! He had also stated that the treasurer’s office has failed to receive certifications for the past five years, but again that is related to the understaffed Office of Finance and not the treasurer’s office.
So imagine my surprise when the day after the forum, after his assertions were totally debunked, he placed on his campaign Facebook pages the very same false claims.
I get that candidates need to have an issue to run with, and I get that it is hard to find failures of the current office operations led by Jody Acosta, which is known for its efficiency and competency such as collecting almost $600,000 in past due water bills and an impressive collection rate of 99.7% while still looking for improvements for the citizens to benefit from.
When you want to ding the treasurer’s office, get your facts right. And when you find out that you majorly goofed, give it up and stop repeating the false information to Falls Church voters to mislead them to get their vote. That, is Leadership 101.
F.C. Should Defer Commitments Until Revenues Assured
The decision on how to vote on the Mt. Daniel school referendum should focus on the City’s financial situation over the next few years. The report “The FY2014 Financial Year-End Report: Where Are We Now and Where Are We Going” is a valuable starting point.
The report begins with assumed average percent increases of 4.1 for revenues, and 5.1 and 6.7 for Gen. Govt. and Schools expenditures, respectively. The separate Debt Service apparently has no funding for a new high school. With no additional revenues, the deficit is projected to increase from $2,145,448 in FY2016, to $4,662,024 in FY2020. The revenue increases include an average increase of the RE tax rate of 1.3 percent, resulting in a tax rate of $1.392 in FY2020.
To eliminate the deficits, three scenarios, differing in revenues from new commercial developments, are presented in the report. With the imminent completion of the Mosaic project, the extensive developments underway at Tysons Corner, and uncertainty regarding the financial outlook for the D.C. area, it is not clear that Falls Church will attract significant commercial development in the next few years. In the extreme case of no new development, the tax rate would rise to $1.5305 in FY2020. If bonds for a new high school are not already included in the report, then the tax rate would rise still further.
I believe that the Council’s policy should be to defer any new commitments until the necessary revenues are assured. Our taxes are already too high. Without this assurance regarding the Mt. Daniel bonds, I recommend a “no” vote on the referendum.
Pre-Funding Pension Destroys Economic Growth
Falls Church City leaders seem to have forgotten an important lecture from their Introductory Macroeconomics class – the paradox of thrift. Keynes taught us (and Krugman often reminds us on these pages) that saving $10 million will reduce economic activity by $30 or $40 million as the initial spending is no longer available to multiply through the economy. Sending the water proceeds to Wall Street will simply inflate stock prices – if we are lucky enough to catch a bull market. Or it could simply evaporate a’ la 2008! The money will not be re-invested in the community as the private sector does not build schools, libraries, parks, etc.
Just as the U.S. government cannot “save” for its future Social Security obligations, the City cannot pre-fund its pension obligations. Trying to do so only destroys economic growth, making it more difficult to pay future bills. The best way to pay any future financial obligation is to invest in public infrastructure that makes Falls Church a more attractive place to live and do business. Prudent public capital projects will “crowd-in” the private investment that leads to greater tax revenue. Unlike saving, investing in the economic development of the City is inflation-proof. Avoiding $500,000 in pension obligations 10 to 20 years from now will not seem very impressive when inflation and economic growth have made it a minuscule fraction of future City budgets. In addition to the economics, there is the issue of optics. Liquidation of a public infrastructure asset should be used to create other infrastructure assets, not “saved” in exotic financial instruments. Just ask Detroit if their innovative financial arrangements (i.e. interest rate swaps) reduced their pension obligations.
Why Not Use Water Sale $ to Fund School Expansion
I certainly agree with the need for the expansion of Mt. Daniel Elementary school but I don’t understand why using the proceeds from the water sale to pay for the expansion doesn’t seem to be under consideration.
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